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New structure for British railways


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1 hour ago, Compound2632 said:

 

Perhaps it should be Cummings' penance?

He's spent 7 hours singing like a canary today to a Select Committee. It will keep the media in business for days or weeks. 

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26 minutes ago, Oldddudders said:

He's spent 7 hours singing like a canary today to a Select Committee. It will keep the media in business for days or weeks. 

 

Yes, and it was only supposed to be for four hours. Certainly cancelled out Shapp's "good news" (repeat).

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1 hour ago, Ron Ron Ron said:

 

I said nothing about performance Mike.

Senior executive pay levels  (in the world at large)  have certainly outstripped general inflation over the last quarter of a century, since the demise of BR.

 

Hopefully many senior roles in this new GBR, will be abolished due to due to duplication or amalgamation of functions, but who takes charge?

A senior figure from the industry, or the man from the ministry?

 

 

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True. But it is the level to which they have outstripped inflation that is so worrying. I know it does not just apply to the railway industry,  but it was the pace being set by other industries well prior to BR privatisation, that caused it. I do not buy the "they will leave if not paid a King's Ransom" theory, hence my comment on performance.

 

As for a man from the ministry, they already tried that - John Welsby as the last, true BR CEO (not Elliot as previously stated..oops). He was from the civil service, and he made a decent fist of the job (I had occasion to work directly for him for a while) on rather less money than his successor (Morton) who was paid an awful lot more for selling the family silver, rather than running a railway. I rather suspect they will ask Hendy to stick around, or even Haines to replace him, as both are competent, both have experience of train company running (in a sense for Hendy) and infrastructure management and are getting less than their predecessors. BUT, this will be a much bigger job, so I cannot see any of the TOC directors being asked. Perhaps Crowther, but I think even she might be out of her depth with this. If they shove in a DafT nominee, I have no idea who that could be - no-one stands out from the list of grey men and women who have "contributed" to the recent debacles - perhaps Shapps is looking for another job?

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Pete Hendy would be the ideal man for the job and I remember reading elsewhere that he's being kept on as some sort of advisor anyway. I've known Pete through the preserved bus hobby since about 1969, so he must be due for retirement soon as he's a couple if years younger than me!

 

Back in the early 1970s he was London's only independent bus conductor, working for Pioneer Coaches on their 235 route up and down Richmond Hill in his gap year. He said then he was going for a job on London Transport, I thought maybe conducting or driving, but no, he got a job as secretary to the head honcho at the time. Little did we know that many years later he would be that head of the organisation! He's been in transport all his life so ought to know it inside out. He still has his PSV driving licence too.

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Without wishing to be unkind to two people that I greatly respect, both Sir PH and AS are no longer of an age where they would make ideal CEO material. Definitely a job for a younger person.

 

Difficult job to fill, I think, because it could really do with someone who has a good track record in a large customer-facing organisation, so that they can get the super-tanker pointing the right way. Someone from the Airline industry? Or, Mike Brown, all the right experience at TfL and BAA, currently a NED with Mott McDonald and doing various other things, definitely the right age.

 

My gut feeling is that HMG will want a ‘new broom’, someone who can see national rail with fresh eyes, but will desperately need a safe pair of hands too.

 

Another ex-TfL tip would be Howard Collins, currently CEO Sydney Trains. Very solid track record and a very good leader.

 

 

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17 hours ago, Mike Storey said:

 

 

 

Many of the people who have been paid these grossly inflated salaries since then, were ex-BR, so less likely to off to another industry (although that has happened of course). There appears to be no rhyme or reason for the massive, inflation busting salaries, other than greed and gross incompetence. There is clear and compelling evidence that Boardroom pay has had nothing to do with company/industry performance for many years now.

 

 

It's very simple. There's been a class war over the past fifty years and the rich 1% have won it. They naturally think that they and people like themselves deserve to be highly rewarded. Of course great responsibility should be recognised and rewarded but not with the equivalent of regular national lottery wins. It would be interesting to see what would happen if national economic perfomance was measured on median incomes and quality of life rather than on mean (average) incomes and GDP.

 

Looking at fares, it does seem to me that every tax payer helps to pay for having a railway then it ought to be more possible for more of us to afford to use it without having to book well in advance. That also brings benefits in terms of emissions and not having to concrete over half the country. It does seem daft that the price you pay depends on how far ahead you book rather than on how busy the train is- there's an obvious benefit in using fares to smooth out peaks of demand but not in using their structure just to screw as much revenue as possible out of every passenger. Fares too high to bear- just go by car!

 

When I travelled quite a lot, mostly but not entirely for my work, during the time of BR, I could apply a basic rule of thumb that the train was cheaper than the marginal cost of using my car if I travelled alone, comparable if two of us travelled together and the car was cheaper if it was filled. That was mostly based on walk up fares and the great advantage of train travel over airline travel (which I sometimes used for longer journeys in the UK such as London-Scotland) was that journeys didn't need to be pre-planned. If my filming took an hour longer than expected or a meeting was shorter, no problem I just used a different train as opposed to hanging around for a couple of hours to get a booked flight because I had to leave margins like that. 

 

 

 

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4 hours ago, Pacific231G said:

It does seem daft that the price you pay depends on how far ahead you book rather than on how busy the train is- there's an obvious benefit in using fares to smooth out peaks of demand but not in using their structure just to screw as much revenue as possible out of every passenger. Fares too high to bear- just go by car!

 

I've never been all that persuaded that fares do smooth out peaks in demand. Who travels on a busy train if they can travel on a quiet one? It might put some people who have to travel at busy times off using the train altogether though.

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1 minute ago, Reorte said:

 

I've never been all that persuaded that fares do smooth out peaks in demand. Who travels on a busy train if they can travel on a quiet one? It might put some people who have to travel at busy times off using the train altogether though.

Well that does smooth out the demand in a way, by making the peaks lower than they otherwise would be.

 

But people generally don't have too much of a say in when they need to travel no matter the mode. Who would be on the M25 at 5pm if they had the choice not to be?

 

Leisure travellers might have some flexibility, but even that depends why they're traveling and how far they're going.

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1 hour ago, Reorte said:

I've never been all that persuaded that fares do smooth out peaks in demand. Who travels on a busy train if they can travel on a quiet one?

 

They can a bit by motivating those who have flexibility in their travel time and care about price to choose a different train, even if they are unaware of the reason why the fare is cheaper (a lot of what is obvious to us isn't as obvious the traveling public).

 

1 hour ago, Reorte said:

It might put some people who have to travel at busy times off using the train altogether though.

 

Which still achieves the goal of reducing overcrowding.

 

On the other hand if you make fares cheap on already busy services you likely make the problems worse, and then you put off people from traveling by train at all because their experience is so horrible.

 

 

 

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10 hours ago, Pacific231G said:

It's very simple. There's been a class war over the past fifty years and the rich 1% have won it. They naturally think that they and people like themselves deserve to be highly rewarded. Of course great responsibility should be recognised and rewarded but not with the equivalent of regular national lottery wins. It would be interesting to see what would happen if national economic perfomance was measured on median incomes and quality of life rather than on mean (average) incomes and GDP.

 

Looking at fares, it does seem to me that every tax payer helps to pay for having a railway then it ought to be more possible for more of us to afford to use it without having to book well in advance. That also brings benefits in terms of emissions and not having to concrete over half the country. It does seem daft that the price you pay depends on how far ahead you book rather than on how busy the train is- there's an obvious benefit in using fares to smooth out peaks of demand but not in using their structure just to screw as much revenue as possible out of every passenger. Fares too high to bear- just go by car!

 

When I travelled quite a lot, mostly but not entirely for my work, during the time of BR, I could apply a basic rule of thumb that the train was cheaper than the marginal cost of using my car if I travelled alone, comparable if two of us travelled together and the car was cheaper if it was filled. That was mostly based on walk up fares and the great advantage of train travel over airline travel (which I sometimes used for longer journeys in the UK such as London-Scotland) was that journeys didn't need to be pre-planned. If my filming took an hour longer than expected or a meeting was shorter, no problem I just used a different train as opposed to hanging around for a couple of hours to get a booked flight because I had to leave margins like that. 

 

 

 

 

Sorry to be antagonistic, but almost all of that is utter boll......cobblers.

 

Many, if not most, of the highly remunerated staff of the privatised railway were previously the horrendously "underpaid" members of BR. So your first assertion is demonstrably wrong.

 

On your second point, "demand pricing" was introduced by BR long before privatisation (by an ex-BA chap, with whom I worked closely on the ER in the 1980's), and quite successfully. The previous system (Apex and Super Apex, introduced by BR in the 1970's and an absolute to sell - I was a Travel Centre clerk for part of that time) did demand that you booked a long way ahead to achieve a significantly reduced fare. But the present system adjusts fares in real time, using a real time algorithm - if there is low demand for a certain departure, the fares stay down right up to the day before (or even the same day on certain routes). Your analysis is not only out of date but inherently wrong. It is entirely possible to book a cheap fare almost up to the departure date, or even time, if you can be flexible (just like airline travel).

 

So your third point is lost on me. But it appears not to be lost on many who have simply pressed the "agree" button, without either any idea of the reality, or any intention to challenge the existing situation. So that's me told then.

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The debate about how to charge for demand at peak times goes on in every industry/service where peaks can arise, from utilities to things as frivolous as cinemas, and IMO there is no perfect answer. The "big issues" from the provider perspective are: the enormous cost penalties of attempting to adequately serve peaks, especially very steep ones; and, the waste of resources serving the deep troughs. Both tall peaks and deep troughs create high unit costs, the first because they necessitate a stack of extra capital spend, and the latter because there are few customers over which to spread the fixed costs of operation.

 

Differential pricing can and does work to smooth peaks, but it has to be aggressively differential - look at budget airlines to see it done remorselessly. My take is that railways have seldom if ever pushed prices in the peaks up far enough to really be effective, and for donkey's years have discounted some peak travel (season tickets), which still seems AAF to me seen from a purely railway perspective (its been used latterly as a way of sustaining cities in a wider context).

 

Lets hope to goodness that post-Covid working patterns are flexible enough to depress the peaks in at least some places/cases, and that the new fare structure makes for a clearly visible and easy to understand system of differentials. Personally I wouldn't go for real-time price changes, because that could quickly become a "turn off", but would go for maybe four bands, with trains highlighted in the public virtual timetable: ordinary; cheap (periods of very low demand); peak; and super-peak (reservation compulsory), the last applicable to intercity travel only to cater for the mad pre-bank holiday rushes. I suppose that what I'm saying is that rail travel should be like a utility, and that the domestic consumer isn't faced with real-time price variability for, say, electricity (yet!).

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2 minutes ago, Nearholmer said:

The debate about how to charge for demand at peak times goes on in every industry/service where peaks can arise, from utilities to things as frivolous as cinemas, and IMO there is no perfect answer. The "big issues" from the provider perspective are: the enormous cost penalties of attempting to adequately serve peaks, especially very steep ones; and, the waste of resources serving the deep troughs. Both tall peaks and deep troughs create high unit costs, the first because they necessitate a stack of extra capital spend, and the latter because there are few customers over which to spread the fixed costs of operation.

 

Differential pricing can and does work to smooth peaks, but it has to be aggressively differential - look at budget airlines to see it done remorselessly. My take is that railways have seldom if ever pushed prices in the peaks up far enough to really be effective, and for donkey's years have discounted some peak travel (season tickets), which still seems AAF to me seen from a purely railway perspective (its been used latterly as a way of sustaining cities in a wider context).

 

Lets hope to goodness that post-Covid working patterns are flexible enough to depress the peaks in at least some places/cases, and that the new fare structure makes for a clearly visible and easy to understand system of differentials. Personally I wouldn't go for real-time price changes, because that could quickly become a "turn off", but would go for maybe four bands, with trains highlighted in the public virtual timetable: ordinary; cheap (periods of very low demand); peak; and super-peak (reservation compulsory), the last applicable to intercity travel only to cater for the mad pre-bank holiday rushes. I suppose that what I'm saying is that rail travel should be like a utility, and that the domestic consumer isn't faced with real-time price variability for, say, electricity (yet!).

 

Laudable, but, in the test of history, utterly useless. The creation of the shoulder peaks is a well known and hard to cater for, phenomenon. Attempts to create additional fare offers to lessen that have led us to the present situation. The reduction of peak time demand by fare manipulation, can easily be shown to work on the WCML (pre-covid, obviously) and to a lesser extent, the ECML. Where it does not work as well, on the GWML and to a certain extent the MML, is because the alternatives have been far less appealing.

 

Where it does not work whatsoever, has been the suburban routes into London (and a few other conurbations) plus many of the outer suburban routes - those facing no choice over when they travel on the odd occasion, have to pay top whack, but those regularly making the same journey have a heavily discounted season ticket, which delivers about one third to one half of the income to the railway, who, at the same time, peak at all their costs. What will be needed is a mechanism which both avoids the sacrosanct, regulated costs of season tickets and also rewards occasional travel in the peaks. That will take some doing, and given it has been tried for the last 120 years, is quite unlikely to happen.

 

The alternative is to accept that the railway is actually an essential public service which needs an adequate subsidy to continue delivering the service it does. That is essentially what is missing from the Williams/Shapps formula.

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2 minutes ago, Mike Storey said:

The creation of the shoulder peaks is a well known and hard to cater for, phenomenon.

 

Fully agree, and TBH I wouldn't even try to adjust fares for it, because attempting to do so layers-in price complexity, and that is one thing that needs to be reduced. There has to come a point where its left to the customer to decide: shall I take that busy, just-after-peak-fares train and suffer, or shall I go later?

 

6 minutes ago, Mike Storey said:

What will be needed is a mechanism which both avoids the sacrosanct, regulated costs of season tickets and also rewards occasional travel in the peaks.

 

Yes, for the long-term benefit of all, get rid of caps on season prices. In fact, better still, get rid of seasons altogether. The period of readjustment would be very painful though, because people have traded the cheaper fares that come from living near work for house price and other advantages of living further away - their lifestyles are intimately connected with railway pricing.

 

I can't see why one would "reward" any peak travel, because it costs a fortune to make capacity available to meet peaks.

 

13 minutes ago, Mike Storey said:

The alternative is to accept that the railway is actually an essential public service which needs an adequate subsidy to continue delivering the service it does. That is essentially what is missing from the Williams/Shapps formula.

 

 

The way I read the report, the belief is that the railway gets plenty of subsidy to do its job, but that a lot of it is frittered in "producing heat rather than light". Whether there is really enough waste in the system to allow subsidy to be held (more likely cut) by reducing waste is the big question - it would be nice to see the figures that the belief is founded upon. And, whether more subsidy would be worth paying to prompt modal shift so as to improve sustainability is another question worth asking.

 

Then there is another question, about all the people for whom subsidising railways seems a complete con, because there isn't a railway within half a county of where they live, or there is, but it doesn't run to anywhere they want to go. Have a look at the railway map of Northamptonshire, as an instance. We really ought to be howling for the Shapps/Whoever review of public transport provision, which means buses in most cases, and not letting Mr Shapps off the hook because he has pronounced on one mode.

 

 

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12 hours ago, Mike Storey said:

 

Sorry to be antagonistic, but almost all of that is utter boll......cobblers.

 

Many, if not most, of the highly remunerated staff of the privatised railway were previously the horrendously "underpaid" members of BR. So your first assertion is demonstrably wrong.

 

On your second point, "demand pricing" was introduced by BR long before privatisation (by an ex-BA chap, with whom I worked closely on the ER in the 1980's), and quite successfully. The previous system (Apex and Super Apex, introduced by BR in the 1970's and an absolute to sell - I was a Travel Centre clerk for part of that time) did demand that you booked a long way ahead to achieve a significantly reduced fare. But the present system adjusts fares in real time, using a real time algorithm - if there is low demand for a certain departure, the fares stay down right up to the day before (or even the same day on certain routes). Your analysis is not only out of date but inherently wrong. It is entirely possible to book a cheap fare almost up to the departure date, or even time, if you can be flexible (just like airline travel).

 

So your third point is lost on me. But it appears not to be lost on many who have simply pressed the "agree" button, without either any idea of the reality, or any intention to challenge the existing situation. So that's me told then.

 

I am sorry M. Storey feels "told" by those who pressed the 'Agree' symbol button.  As one of those who did so, perhaps I may explain what I thought Pacific231G was saying (although I have no wish to put words into her/his mouth) and hence why I thought the post had merit enough to which I would 'Agree'.

 

Para. 1.  The attribution of a "class war" might be 'direct', but the documentation of modern increasing income disparity and the slavishly uncritical adherence to neo-liberal economics is readily available.  The continuing reward of the highly-paid for continuing failure (e.g., Baroness Dido Harding) is covered fort-nightly in 'Private Eye', for example, and probably many web-sites of which I am unaware.  These analyses appear plausible to me, although if there is another socio-economic explanation for the phenomena I would be glad to learn it.

 

Interestingly, I thought it was hinted at in the Williams-Shapps Report itself, in the passive-aggressive graphics at the top of p.97: "Over 30% of total rail costs in 2019-20 were staff costs [I believe in most firms staff costs are half of expenditure.]", "Rail industry wage growth has increased on average above the rate of inflation over the past decade", and ">250 days of strike action have occurred since 2016 [Presumably mostly the Southern Railway dispute provoked on the instructions of govt.; see 'Private Eye', etc.]".  See also p. 101 about collecting "Comprehensive data".

 

Coming from a Minister in a government whose slavish devotion to free-market economics and the Law of Supply and Demand, this hinted to me that the 'lower orders' were not to be permitted such pay privileges, which are to be reserved to those such as Managing Directors, Chief Executives, etc.  I thought Pacific231G's remark was aimed at them, the firm's Executives whose pay has increased way above inflation.  I am reassured to hear from M. Storey there are still many such industry stalwarts still in post in charge - Mr Tom Joyner, Cross Country Trains, is highly thought of, I believe - but I thought current problems (e.g., G.W.M.L. electrification) were caused by experienced B.R. staff having left the industry in large numbers.

 

As to paras 2 and 3 - pricing vs over-crowding during different times of the day, and an 'average rule of thumb' to be applied to 'when to take the motor-car', I bow to M. Storey's superior knowledge of B.R. and current ticketing practices for para. 2.  In simple terms, from a 'stake-holder' point of view, 'affordability' will depend upon the decisions made by the current government, which has been argued above and below more eloquently than can I.

 

As one who does not hold a driving licence, I assumed the 'rule of thumb' for one deciding how to spend one's cash makes sense, if not taking account of the discounted tickets outlined.  It did not appear outrageous to me, so I 'Agreed'.

 

I confess I did not understand the suggestion of my and others being "without either any idea of the reality, or any intention to challenge the existing situation".  I hope this inelegant, 'on the hoof' explanation makes sense.  With my best wishes to you all, and apologies if I have 'put words in others' mouths' if trying to explain.

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2 hours ago, C126 said:

"Over 30% of total rail costs in 2019-20 were staff costs

 

I thought that, as an implied criticism, was blooming odd too, and would love to see how it was calculated (the detail is probably in Mr Williams report if I go look), and what the comparators are. 

 

Calculating "staff" costs for any output is a thing fraught with complexity, because it depends hugely at which point in the chain it is calculated, because at very base the only cost that can exist is that of labour. Added to which, there is no fixed definition of "good or bad" in terms of % staff costs, especially when the labour element of bought-in services is not counted as "staff" - the analysis can quickly flip to being one about "make or buy".

 

Might have been more honest to say: Staff cost are X; we believe they can reasonably be reduced to Y.

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2 hours ago, C126 said:

Mr Tom Joyner, Cross Country Trains, is highly thought of, I believe

I know I left 17 years ago, but he was a colleague in my final post and I thought him first rate. He had been at the sharp end, I think, which always helps. On one occasion he and I changed trains at Broxbourne, and everyone there - station staff and traincrew - knew him. 

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14 hours ago, Mike Storey said:

The alternative is to accept that the railway is actually an essential public service which needs an adequate subsidy to continue delivering the service it does. That is essentially what is missing from the Williams/Shapps formula.

 

And I've said this for a long time. The railway is either national infrastructure and a public service , or it's a profit making entity, but it's unlikely to be both - some parts will generate more revenue than others (eg a main line to London is likely to pull in far more revenue than a branch line in the North East , but as a public service they are equally as important). Despite all the talk and hot air about green credentials , very little is actually done about encouraging the use of rail for freight by way of incentive. Even the concept of using diesel trains for hundreds of miles under the wires because it's more operationally convenient should be discouraged by lower track access charges for electric traction and I'd argue some kind of tax incentive to buy/lease and use that electric traction as much as possible. Granted this would add time into freight train schedules in changing from diesel to electric power ( assuming no bi-mode traction) and the costs of staff to do so, but in the grand scheme of things these things are achievable with the right amount of willpower and appropriate management and timetabling.

 

Expanding on this point , does for example , road tax actually cover the costs of the national road network in terms of upkeep and construction? Likewise with the National Air Traffic system?

 

 

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59 minutes ago, Nearholmer said:

 

I thought that, as an implied criticism, was blooming odd too, and would love to see how it was calculated (the detail is probably in Mr Williams report if I go look), and what the comparators are. 

 

Calculating "staff" costs for any output is a thing fraught with complexity, because it depends hugely at which point in the chain it is calculated, because at very base the only cost that can exist is that of labour. Added to which, there is no fixed definition of "good or bad" in terms of % staff costs, especially when the labour element of bought-in services is not counted as "staff" - the analysis can quickly flip to being one about "make or buy".

 

Might have been more honest to say: Staff cost are X; we believe they can reasonably be reduced to Y.

 

Speaking as one of the supposed "expensive" members of staff , you have to ask how exactly they intend to reduce those costs.

 

I fully accept that pay increases of any kind are neither practical ,feasible or indeed morally correct in the present economic climate, but by the same token I fail to see how frontline staff should be in the crosshairs for the perceived excessive costs within the industry when in many cases the real issue lies elsewhere.

 

We seem to be tarred with the "always on strike" brush , as referred to in the report and in earlier posts , but I'd counter that with the point that in my nearly 25 years of service I have yet to take a single day of industrial action despite being a trade union member.

 

 

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30 minutes ago, Supaned said:

The railway is either national infrastructure and a public service , or it's a profit making entity, but it's unlikely to be both

 

But that is how it was originally conceived, and how it functioned for over a century.

 

32 minutes ago, Supaned said:

Expanding on this point , does for example , road tax actually cover the costs of the national road network in terms of upkeep and construction? 

 

A poor comparison, not least since road tax has not existed for many years. We pay vehicle excise duty and fuel tax, both of which go into the general exchequer. It's like saying alcohol duty should pay for public houses.

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21 minutes ago, Supaned said:

Expanding on this point , does for example , road tax actually cover the costs of the national road network in terms of upkeep and construction? Likewise with the National Air Traffic system?

 

 

The total of road and vehicle derived taxes, far exceeds the amount spent on roads in the UK.

Road fund licence, VAT on new car purchases, fuel excise duty, MOT charges, VAT On almost everything from accessories, spare parts, servicing costs (inc. labour) etc.

It all goes in the general treasury pot, but without road users paying, that income wouldn't be there.

 

The National Air Traffic system (Covid excepting) has been a self sustaining, free standing, profit making operation for decades.

There are no subsidies.

NATS is a private sector company, where the UK government hold a 49% "golden share", but take no active part in any of its operation or management. a silent partner if you wish.

Where there was a previous big downturn in revenue (post 9/11) the loss in income was mostly dealt with internally by various mechanisms (e.g. a pension contribution holiday for the company), investment from the (former) BAA (who received 5% shares in return.... and a small grant from the government, which was basically a return of some of the money generated for the government by the privatisation the year before.

 

 

.

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9 minutes ago, Compound2632 said:

But that is how it was originally conceived, and how it functioned for over a century.

 

 

And for most of that period, the railway was the majority carrier of both passengers and freight with little in the way of viable alternative. Fast forward to 2021 and it's mainly a passenger carrying railway with some freight , in both cases nowhere near the levels of before, and that's without factoring in any pandemic related number reductions, and with a huge proportion of freight now transported by road because it's cheaper and more convenient for door to door service.

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